Part 2Anti-avoidance and revenue protection

Pensions

48Extension of special annual allowance charge

(1)

Schedule 35 to FA 2009 (special annual allowance charge) is amended as follows.

(2)

In paragraph 1(2) (high-income individual)—

(a)

in the first sentence, for “£150,000” substitute “ £130,000 ”, and

(b)

insert at the end—

“Paragraph 16A makes special provision about cases in which the individual's relevant income for the tax year 2009-10 is less than £150,000.”

(3)

In paragraph 2 (calculation of relevant income)—

(a)

in the last sentence of sub-paragraph (1),

(b)

in sub-paragraph (2) (in each place), and

(c)

in sub-paragraph (3) (in both places),

for “£150,000” substitute “ £130,000 ”.

(4)

After sub-paragraph (5) of that paragraph insert—

“(5A)

If—

(a)

the individual's relevant income for the tax year (whether that is the tax year 2009-10 or a later tax year) would (apart from this sub-paragraph) be less than £130,000 if the reference in sub-paragraph (5) to a scheme made on or after 22 April 2009 were to a scheme made on or after 9 December 2009, and

(b)

the individual's relevant income for the tax year 2009-10 is less than £150,000,

the individual's relevant income for the tax year is to be assumed to be less than £130,000.”

(5)

In paragraph 11(3)(b), after “22 April” insert “ 2009 ”.

(6)

After paragraph 16 insert—

“16AIndividuals with relevant income below £150,000 in 2009-10

(1)

This paragraph has effect if the individual's relevant income for the tax year 2009-10 is less than £150,000.

(2)

References in this Schedule to a pre-22 April 2009 pension input amount are to a pre-9 December 2009 pension input amount.

(3)

References in this Schedule to noon on 22 April 2009 are to 9 December 2009.

(4)

Other references in this Schedule to 22 April 2009 (except in paragraph 2) are to 9 December 2009.

(5)

The reference in paragraph 16(2) to 21 April 2009 is to 8 December 2009.

(6)

If the amount arrived at in the case of the individual under sub-paragraph (1) of paragraph 2 for the tax year 2009-10 is less than £150,000, take the steps in that sub-paragraph in relation to the tax year 2007-08 and the tax year 2008-09.

If the result is £150,000 or more for either or both of those earlier tax years the individual's relevant income for the tax year 2009-10 is to be assumed for the purposes of sub-paragraph (1) to be £150,000.

(7)

If there is a scheme the main purpose, or one of the main purposes, of which is to secure that the individual's relevant income for the tax year 2009-10 is less than £150,000, it is to be assumed for the purposes of sub-paragraph (1) to be £150,000.”

(7)

The amendments made by this section have effect for the tax year 2009-10 and subsequent tax years (but see paragraph 21(2) of Schedule 35 to FA 2009).